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ACFO launches petition calling for mileage rates for plug-in cars

EV charging

Fleet representative body ACFO has launched a petition calling on HMRC to publish Advisory Fuel Rates (AFRs) for electric cars.

It believes that the absence of defined mileage reimbursement rates for 100% electric vehicles (EVs), range extended electric vehicles, and plug-in hybrid petrol and diesel models is a handicap to some organisations including plug-in vehicles on their company car choice lists.

To overcome the issue, it submitted proposed rates for EVs, range-extended EVs, and plug-in hybrid petrol and diesel models, last year.

However, an HMRC spokesman told Fleet News at the time that there would be “no change” to its approach on AFRs.

The organisation has launched the petition on its website - www.acfo.org - and via its LinkedIn and Twitter channels, and is planning on collecting signatures at Company Car In Action at Millbrook Proving Ground in Bedfordshire on June 12 and 13.

AFRs apply where employers reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel. Published quarterly, they provide a range of rates based on engine size and fuel type (petrol, diesel or LPG), and when used, are deemed to be tax-free.

ACFO’s proposals to HMRC included: AFRs for cars with a battery capacity up to 40kWh and above 40kWh - 4p and 5p a mile respectively; AFRs for plug-in hybrid petrol cars linked to electric mileage range and current engine capacity-based on AFRs for petrol cars with reimbursement rates ranging from 5p to 19p a mile; and AFRs for plug-in hybrid diesel cars linked to electric mileage range and current engine capacity-based on AFRs for diesel cars, with reimbursement rates ranging from 5p to 12p a mile.

Furthermore, it recommended that AFRs for range extended electric vehicles should be calculated using above figures based on 90% electric mile range and 10% petrol/diesel mileage range using appropriate AFR figure.

The calculations follow a similar format to that used by HMRC to compile AFRs for petrol, diesel and LPG cars and include: mean battery capacity from manufacturers’ information, weighted by available models and average battery capacity (kWh); electric mileage range adjusted downwards by 15% to take account of real driving conditions and impact on manufacturers’ stated range; average battery recharge cost.

Figures from the Society of Motor Manufacturers and Traders for the first three months of 2018 reveal that registrations of plug-in and hybrid vehicles continue to rise, albeit modestly, up 5.1% year-on-year, with demand for plug-in hybrids driving growth, up 18.2% last month.

ACFO chairman John Pryor said: “Plug-in hybrid vehicles are at their most efficient when driven for as many miles as possible on electric power. Therefore, publishing lower Advisory Fuel Rates for plug-in cars will help to encourage drivers to use the car in the optimal environmentally-friendly way.”

ACFO acknowledges that it is possible for businesses to calculate rates themselves and then obtain permission from HMRC to use them to reimburse drivers.

However, Pryor says it can be extremely time consuming and difficult to obtain all the relevant data to undertake those calculations. “Far better for HMRC to publish official figures as it does for petrol, diesel and LPG cars,” he said.

Despite the raft of information supplied to HMRC from ACFO, Pryor says he is disappointed that HMRC has failed to respond.

Nevertheless, he said ACFO intends to keep up the pressure and hopes that fleet decision-makers and the industry will support the petition in their thousands.

“We will submit the petition to HMRC in early autumn in the hope that the government will make an announcement in this year’s November Budget that it will introduce Advisory Fuel rates for plug-in cars,” he said.

“Advisory Fuel Rates for plug-in cars are essential. The rates we have provided to HMRC and the details as to how the figures were arrived at are as straightforward to apply as the current simple to use system for petrol, diesel and LPG cars.

“The figures we have calculated deliver a simple pence per mile mechanism that is both cost effective for employers so they are seeing a benefit from the more efficient technology, while employees are being fairly reimbursed for business mileage based on the capabilities of the plug-in vehicle technology.”  

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  • The Engineer - 30/04/2018 17:39

    AFRs for pure electric is feasible, but for plug-in hybrids would be ludicrous, as it would be a big burden on the driver to claim both electric rates and petrol rates on many journeys, the extra logging would be very tedious. Most PHEV's use some periods of engine power to provide adequate performance even with plenty of battery charge still available. Its almost impossible to work out the division of use of either power source accurately. To try and use the manufacturers 'lab condition' range to calculate electric AFR miles would be a disaster as they are often near double real world range, especially in cold weather when the battery has other demands upon it. Suppose a 40kw vehicle manages real world 130 miles. That is 0.3kw/h per mile. At about 11p per domestic unit that is 3.3p per mile cost to the driver. A 4p reimbursement might appear to cover it but won't if the driver needs to use the rapid charge network to get home safely at 30p per kw/h. Its going to leave drivers heavily out of pocket. Again, bad for EV take-up. Glad the HMRC have more sense than the ACFO and dismissed it!

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